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REPORT 



RELATING TO THE 



Revenues of the Memphis City Schools 



Dated April 30, 1910 



TO 

Mr. C. C. Hanson, Chairman 

COMMITTEE 

OF 

BUREAU OF MUNICIPAL RESEARCH 

OF 

THE MEMPHIS CITY CLUB 



Haskins & Sells 
certified public accountants 

30 Broad Street 
New York 



Williamson Building 
Chicago 



Marquette Building 

Cleveland 



30 Coleman Street 
Third National Bank Bldg. London, E. C. Farmers Bank Building 

ST. LOUIS Pittsburgh 

Cable Address " Hasksells " 



REPORT 



RELATING TO THE 



Revenues of the Memphis City Schools 



Dated April 30, 1910 



TO 
Mr. C. C. Hanson, Chairman 

COMMITTEE 

OF 

BUREAU OF MUNICIPAL REvSEARCH 

OF 

THE MEMPHIS CITY CLUB 



Haskins & Sells 

CERTIFIED PUBLIC ACCOUNTANTS 

30 Broad Street 

New York 



Marquette Building 
Chicago 



Third National Bank Bldg. 
St. Louis 



30 Coleman Street 
London, E. C. 



Cable Address " Hasksells. 



Williamson Building 
Cleveland 



Farmers Bank Building 
Pittsburgh 



u-^"";^ 



V\^ 



\X 



D. OF D. 

SEP 6 1910 



HAS KINS & SELLS 

CERTIFIED PUBLIC ACCOUNTANTS 

30 BROAD STREET 

NEW YORK 

LONDON, E.C. 

30 COLEMAN STREET 
/ 

CHICAGO ST LOUIS CLEVELAND PITTSBURGH 

MARQUETTE BUILDING THIRD NATIONAL BANK BUILDING WILLIAMSON BUILDING FARMERS BANK BUILDIN6 



CABLE ADDRESS "HASKSELLS" 

New York, April 30, 1910. 

Mr. C. C. Hanson, 

Chairman, Committee of Bureau of Municipal Research 
of the Memphis City Club, 

Memphis, Tenn, 
Dear Sir : 

In compliance with your request that we confer with Mr. Charles Haase, 
Chairman of the Finance Committee of the Board of Education of the City 
of Memphis, and make such examination of school matters as he desired, 
we beg to state that Mr. Haase requested us to investigate the sources of 
revenues of the Memphis City Schools, and prepare an estimate of the 
revenues for the year ending June 30, 191 1. 

Relating thereto, we submit herewith five exhibits, together with com- 
ments, as follows : 

Exhibit 

"A" Statement of School Revenues Collected (less allowances 

TO OFFICIALS FOR SERVICES) DURING THE YEAR AND NINE 
MONTHS ENDED MARCH 31, I9IO, SHOWING SOURCES FROM 
WHICH DERIVED, AND ESTIMATE OF PROBABLE COLLECTIONS 
DURING THREE MONTHS ENDING JUN'E 30, I9IO, AND 
COMPARISON. 

*'B" Statement of School Revenues Collected (less allowances 

TO officials for services) during THE NINE MONTHS 

ENDED March 31, 1910 — by months— showing sources 

FROM which derived. 

*'C" Statement of School Revenues Collected (less allowances 

to officials for services) during the YEAR ENDED 

June 30, 1909 — BY MONTHS— showing sources from which 

DERIVED. 

*'D" Statement of Funds Available for City School Purposes, 

AND PAYMENTS TO SCHOOL BOARD — FOR THE YEAR AND 
NINE MONTHS ENDED MARCH 3I, I9IO. 

*'B" Statement of Real and Personal Property Taxes and 

Poll Taxes Levied for School Purposes — by years — for 
FIVE years ended August 31, 1909 — showing proportion 
collected and not collected. 



COMMENTS. 

The revenues for the support of the Memphis City Schools are obtained 
from three general sources, viz.: 

State of Tennessee, 
County of Shei^by, 
City of Memphis. 

STATB OF T:eNNKSSEK. 
State School Fund. 

The State School Fund was created by Chapter 25, Laws of 1873, State 
of Tennessee. The law provides that the fund shall consist of $2,512,500, 
and that the interest thereon shall be at the rate of 6 per cent, per annum. 
The proceeds are dedicated to the support and maintenance of the public 
schools of the State. 

To the original sum may be added the proceeds of all escheated property, 
of all property accruing to the State by forfeiture, of all lands sold and 
bought in for taxes, of the personal effects of intestates having no kindred 
entitled thereto by the law of distribution, and donations made to the State 
for the support of the public schools unless otherwise directed by the donors. 

The Comptroller's report of the State of Tennessee for the two years 
ended December ig, 1908, contains no information relative to the present 
status of the fund, so that it is not known whether the original grant of 
$2,512,500 has been augmented by revenues from the sources above 
referred to. 

The annual interest at the rate of 6 per cent, on $2,512,500 amounts to 
$150,750. The interest distributed among the several counties of the State, 
according to pages 162 to 165 of the Comptroller's report, was as follows : 

Year 1907 $136,719-93 

Year 1908 131,322.88 

The difference between the annual interest and the interest distributed 
is caused by the payment of the expenses of the ofBce of the State Superin- 
tendent of Schools out of the income from the fund, in accordance with 
existing law. 

General Education Fund. 

This fund was created by Chapter 264, Laws of 1909, Slate of Tennessee, 
which provides that twenty-live per cent, of the " Gross revenue of the State" 
shall be paid into the fund, of which sixty-one per cent, is to be apportioned 
among the counties of the State according to scholastic population, in the 
same manner that the interest on the State School Fund is apportioned. This 
law was passed April 29, 1909, and repealed Chapter 537, Laws of 1907, 
which appropriated annually seventy-five cents for every pupil of lawful 
school age in the State. 



Under the new law, the revenue from this source for the year ending 
June 30, 1910 (no more will be received prior to that date), amounts to 
$11,097.18 less than for the year ended June, 30, 1909, during which time 
the old law was in effect. 

COUNTY OF SHBI/BY. 

Real and Personal Property Taxes. 

These taxes are levied by the County officials, and collected by the 
County Trustee. The assessment should be made as of the tenth day of 
January of each year, the taxes being due the following October. 

Heretofore, the greater portion of these taxes has been collected in 
February and March of the year following that in which they were due. 
This, for recent years, is shown by the collections appearing in Exhibits 
"B" and "C." 

Pick Up Taxes. 

Pick Up Taxes are Real and Personal Property Taxes collected on 
property which is not included in the regular Tax Assessment Rolls. The 
larger portion of the amount collected is for taxes on railroad, telegraph and 
telephone properties within the County, the valuation of which is fixed by 
the State officials. These taxes are collected by the County Trustee. 

Revenue Agent Taxes. 

These are taxes collected on Real and Personal Property not included 
in the regular tax assessment rolls. They differ from "Pick Up Taxes" in 
that their collection is from persons who have endeavored to evade payment, 
while the collections under the title "Pick Up Taxes," excepting those from 
railroad, telegraph and telephone companies, are from persons who volun- 
tarily come forward and pay their taxes. These taxes are likewise collected 
by the County Trustee. 

Delinquent Real and Personal Property Taxes. 

Real and Personal Property Taxes become delinquent the first day of 
March in the year following that in which the taxes become due, and on the 
first Monday in May the Real Property is advertised to be sold on or about 
the first of June. After the property is sold, the papers are transmitted to 
the Circuit Court Clerk, and the former owner then has two years in which 
to redeem it. 

The collection of these taxes is made by the Circuit Court Clerk. 

Poll Taxes. 

The assessment of these taxes is made by the County officials and the 
entire proceeds are allotted to school purposes. The Poll Taxes assessed 
during the five years from 1905 to 1909, inclusive, and the amounts thereof 



collected, are shown by Exhibit "E." From this it appears that the assess- 
ment for the year 1909 is $7,476, or 3,738 polls, less than for the year 1905. 
These taxes are collected by the County Trustee. 

Merchants Privilege Taxes. 

Chapter 479, Laws of 1909, authorizes the assessment of this tax for 
school purpo.ses on a basis of fifteen cents for each one hundred dollar 
valuation of the average capital invested in business. To this amount the 
County adds an assessment for school purposes of thirteen cents for each one 
hundred dollar valuation, making a total levy of twenty-eight cents. 

In addition, the State collects a privilege tax of fifteen cents for each 
one hundred dollar valuation of the average invested capital. Of this the 
schools receive seven and one-half cents. These taxes are collected by the 
County Court Clerk. 

Marriage Licenses. 

Marriage Licenses are issued by the County Court Clerk and the fee 
of $2.00 is collected by him. All this revenue is devoted to school purposes. 

Dog Taxes. 

This tax is authorized by Chapter 32 of the laws of 1907, which pro- 
vides for the registration, by the Clerk of the Circuit Court, of all female 
dogs in the county. The charge for this service is three dollars for each 
dog registered, of which amount the Clerk of the Court is allowed fifty cents 
as his fee. In addition, he is authorized to deduct from his collections the 
cost of books, collars, tags and other necessary expenses. 

The law provides that any person owning or keeping a female dog three 
months old, or more, and failing to apply for registration thereof, shall be 
guilty of a misdemeanor and upon conviction shall be fined not less than 
five nor more than twenty-five dollars. 

At the present time this tax is not being enforced. 

CITY OF MEMPHIS. 

Real and Personal Property Taxes. 

The assessment of property is made by the City Assessor. The rate of 
taxation is fixed by the City Commission, with the exception of that for 
school purposes, which is fixed by law. 

The assessment rolls should be compiled at the beginning of the year and 
delivered to the Board of Equalization by May ist. This Board is allowed 
thirty days in which to hear complaints, after the expiration of which time 
the rolls should be turned over to the County Trustee for collection. These 
taxes are payable to the County Trustee and the greater portion thereof is 
collected during the months of July and August. 



Pick up Taxes. 
Revenue Agent Taxes. 

These Taxes are of a nature similar to those described in the comments 
on County Taxes and are collected by the County Trustee. 

RBV:eNUE FOR THE YEAR IQIO. 

The foregoing describes all the sources from which the revenues of the 
School Board of the City of Memphis are derived. State and County 
Revenues are apportioned between the County and City Schools as collected ; 
and likewise the School Revenues from the City are available only as 
collected. Exhibit "A" shows the Revenues collected (less allowances to 
various officials for services) during the year and nine months ended 
March 31, 1910, as well as an estimate of probable collections during the 
three months ending June 30, 19 10. 

From this exhibit it will be noted that, although the collections of 
State and County Revenues for the year ending June 30, 1910, will be 
approximately $9,595.38 more than those for the preceding year, the County 
will receive $15,108.88 less, and the City $24,704.26 more. This is mainly 
due to a greater increase in the scholastic population of the City than in that 
of the County ; all State and County Revenues being divided between the 
City and County in proportion to their respective scholastic populations. 

It will be observed from the table below, compiled from the books in 
the office of the County Trustee, that in the year 1910 the scholastic popula- 
tion of the City is approximately 66 per cent, of the total of the County as 
compared with 54 per cent, in the year 1905. 

, ScHoivASTic Population » 

1910 1909 1908 1907 1906 1905 

Total of Comity of Shelby 82,537 77.928 71.320 64,518 64,175 56,578 

Total of City of Memphis 54.614 48,030 43.701 36,911 36,911 30.630 

Proportiou of Total of County 66.17% 61.63% 61.27% 57-2i% 57-52% 54-i4'^o 

The increased City Revenues for the year ending June 30, 19 10, will be 
mainly due to the City's tax levy for the year being twenty-five cents on the 
one hundred dollar valuation, as compared with twenty cents for the prece- 
ding year. 

REVENUE FOR THE YEAR 1911. 

A reliable estimate of revenues to be received by the School Board for 
the year ending June 30, 191 1, would be difficult of preparation owing to the 
many conditions affecting their collection. The indications are, however, 
that the revenue from all sources will be twenty to twenty-five thousand 
dollars more than during the year ending June 30, 1910. 

The largest portion of the Board's revenue is derived from Real and 
Personal Property Taxes, the assessment of which for the year 1910 is now 



being made, and if the ratio of increase in values of the preceding year, 
as shown by Exhibit " E," is maintained, the additional revenue at the 
disposal of the School Board, from this source, should amount to approxi- 
mately $10,000 to $12,000. 

SUIT AGAINST THE CITY OF Mi^MPHIS. 

During the year 1908, the School Board instituted suit against the 
City of Memphis to compel it to levy a tax of five cents in addition to the 
twenty cents on the one hundred dollar valuation of Real and Personal 
Property levied by the City in 1908 for school purposes. The Chancery 
Court of Shelby County decided the case in favor of the School Board, 
whereupon it was appealed to the Supreme Court of the State, which Court, 
on April 5, 1909, affirmed the decision of the lower court. 

On June 26, 1909, the Chancery Court ordered that this tax of five 
cents be levied for the benefit of the Public Schools ; that the Council hold 
such meetings as were required incident to the preparation of the necessarj^ 
tax books, and that, when ready, the books be turned over to the County 
Trustee for the collection of the taxes, such taxes to become delinquent 
May I, 1910. The Court further ordered that the writ of mandamus, as to 
the levy of the tax and the action taken by the Council, be rt turned on the 
first Monday of December, 1909. 

The levy of this additional tax of five cents would render between 
thirty-five and forty thousand dollars available for school purposes. 

BOND INT:ERBST and sinking fund INSTALMENTS. 

In connection with our investigation, we have examined the School 
Board's estimate of expenditures for the year 19 10, submitted to the City 
Commission, and find that it includes allotments providing for the payment 
of Bond Interest amounting to $47,627.50 and Sinking Fund Instalments 
amounting to $35,542. 

At the present time the outstanding bonds issued for school purposes 
are as follows : 



Issue. 


Date of Maturity. Rate of Interest. 


Amount. 


1889 

1899 

1902 

1902 

1902 

1903 

1905 

1907 

1909 

1909 (Lenox) 


July I, 1911 

July I, 1919 

April I, 1 9 16 

April I, 1921 

April I, 1926 

July I, 1928 

July I, 1945 

July I, 1937 

July I, 1959 

Feh. I, 1929 


6% 

4% 
4% 
4% 

4% 

4>^% 

4K^% 

4% 

4^% 

5% 


$25,000 

28,500 

25,000 

25,000 

20,000 

75,000 

125,000 

300,000 

498,000 

50,000 


Total 




$1,171,500 









We have examined the laws authorizing the issuance of these bonds, 
and are of the opinion, in concurrence with that of counsel obtained by you, 
that the payments of interest thereon and of the required sinking fund 
instalments to provide for their retirement at maturity, with the exception 
of those in connection with the issue of the year 18S9, are not proper charges 
against the revenues of the School Board ; the twenty-five cent tax on each 
one hundred dollar valuation of real and personal property for school pur- 
poses being levied for the specific purpose of meeting the current expenses 
of the schools, exclusive of bond interest and sinking fund payments. 

We beg to express our appreciation of the uniform courtesy and assist- 
ance extended to us during the course of our work. 

Yours truly, 

HASKINS & SELLS, 

Certified Public Accoiintaiits. 



CITY OF 

statement of School Revenues collected (less allowances to ofi&cials for 
ing sources from which derived, and Estimate of Probable Collec- 



Three Months 

ENDING June 30, 1910, 

Estimated. 



State and County Schooi. Revenues : 

Interest on Slate School Fund 

State Apportionment, 1908 

State Apportionment of General Education Fund., 

Real and Personal Property Taxes 

Pick Up Taxes 

Revenue Agent Taxes 

Delinquent Real and Personal Property Taxes 

Poll Taxes 

Merchants Privilege Taxes and Marriage Licenses. 
Miscellaneous 



Total State and County Revenues. 



County Schools' Proportion. 
City Schools' Proportion 



Total. 



City School Revenues : 

Real and Personal Property Taxes. 

Pick Up Taxes 

Revenue Agent Taxes 



Total City Revenues 

Summary of City School Revenues : 

Proportion of State and County Revenues. 



City Revenues. 

Total City School Revenues. 



144,626 50 
12,720 00 



1,500 00 

5,000 00 

100 00 



163,946 50 



121,637 04 
42,309 46 



^563, 946 50 



5,000 00 



5,000 00 



12,309 46 
5,000 00 



147,309 46 



Exhibit "A. 



MEMPHIS. 



services) during the Year and Nine Months ended March 31, 1910, show- 
tions for Three Months ending June 30, 1910, and Comparison. 



Nine Months 

ENDED 

March 31, 1910. 



$12,953 86 



46,764 36 

163,963 04 

19.995 18 

1,066 55 

741 61 

21,558 67 

14,983 14 
86 04 



$282,112 


45 


195,508 

186,604 


13 
32 


$282,112 


45 


$198,695 10 
710 06 

638 67 


$200,043 


83 


$186,604 

200,043 


32 
83 


$386,648 


15 



Year Ending 
June 30, 1910. 



I' 2,953 86 



46,764 36 

208,589 54 

32,715 18 

1,066 55 

741 6[ 

23,058 67 

19,983 14 
186 04 



$346,058 95 



$117,145 17 
228,913 78 



$346,058 95 



1203,695 10 
710 06 
638 67 



$205,043 83 



$228,913 78 
205,043 83 

1433-957 61 



Year Ended 
June 30, 1909. 



$11,965 49 
57,86r 54 



181,212 39 

30,664 54 

2,550 49 

I-3I3 76 

25,078 20 

21,143 04 

4.674 12 



1336,463 57 



$132,254 05 
204,209 52 



1336,463 57 



1155,491 29 
371 45 
883 34 



$156,746 08 



$204,209 52 
156,746 08 

1360,955 60 



Increase. 



fe88 37 



46,764 36 

27,377 15 
2,050 64 



Decrease. 



.595 38 



J, 704 26 



,595 38 



$48,203 8r 
338 61 



l57,86r 54 



1.483 94 

572 15 

2,019 53 

1,159 90 
4,488 08 



$15,108 



^,297 75 



$24,704 26 
48,297 75 

$73,002 01 



$244 67 



:Exhibit "A.' 



CITY OF MEMPHIS. 

statement of Funds Available for City School Purposes and Payments to 

School Board, for the Year and Nine Months 

Bnded March 31, 1910. 



Funds Avaii^able : 

Balance due from County Trustee at begin- 
ning of period 

Revenues collected, per Exhibit "A" 

Total 

Less — Sinking Fund Installments deducted 
by City 

Funds available 

Payments to School Board 

Balance due from County Trustee at end of 
period 

Total 



Nine Months 

Ended 
March 31, 1910. 



116,448 45 
386,648 15 



$403,096 60 
25,541 66 



?377o54 94 



1334,052 27 
43.502 67 



7o54 94 



Twelve Months 

Ended 

June 30, 1909. 



512,341 19 
360,955 60 

|373>296 79 

25,541 66 

1347,755 13 
1331,306 68 

16,448 45 
755 13 



Exhibit "D.' 



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